Capital One Financial Corporation operates as the financial services holding company for the Capital One, National Association, which engages in the provision of various financial products and services in the United States, Canada, and the United Kingdom. It operates through three segments: Credit Card, Consumer Banking, and Commercial Banking. The company accepts checking accounts, money market deposits, negotiable order of withdrawals, savings deposits, and time deposits. Its loan products include credit card loans; auto and retail banking loans; and commercial and multifamily real estate, and commercial and industrial loans. The company also offers credit and debit card products; online direct banking services; and provides advisory, capital markets, treasury management, and depository services. It serves consumers, small businesses, and commercial clients through digital channels, branches, cafés, and other distribution channels located in New York, Louisiana, Texas, Maryland, Virginia, New Jersey, and California. The company was founded in 1988 and is headquartered in McLean, Virginia.

Capital One looks like a solid financial business with a moderate valuation, but without a clear reason for an aggressive price target increase. A P/E at the industry median suggests fair valuation on earnings, while a P/B of 1.00, P/S of 1.65, and especially a P/FCF of 4.26 are noticeably below the sector median, supporting the case for undervaluation on cash flow and book value. At the same time, the trend in the multiples is generally favorable: P/B and P/S have recently declined or remained stable amid improving results, which is usually positive for valuation. Profitability looks mixed: ROA of 1.52% is above the industry median, while ROE of 9.01% and ROI of 6.28% are below the median, and operating and net margins also lag the sector, which limits re-rating potential. A key strength remains return on tangible equity of 15.13%, which is above the industry benchmark and confirms good returns on tangible capital. Leverage looks manageable: debt/equity of 0.39 is below the median, and long-term debt has decreased over the year, reducing financial risks. Liquidity is not a strong point, since the quick ratio is formally zero, but for a bank/financial company this is less critical, and a current ratio of around 1.0 looks acceptable. Revenue, operating income, and net income in TTM are significantly above last year’s levels, confirming recovery and supporting intrinsic value. Equity and assets remain very large and generally stable, indicating the scale and resilience of the balance sheet. The dividend yield of 0.36% is low, but it has improved slightly, so the dividend factor is more neutral-to-positive than a valuation driver. Overall, the picture does not look weak, but some profitability metrics are still below industry benchmarks, so upside potential should be assessed conservatively. For an investor, this means the stock looks more fairly valued with a moderate margin of safety than like a clear deep-discount story.

Capital One Financial Corporation

Сильный индекс, значительно упал. Оптимистичный взгляд на свои позиции резко сменился на неуверенность.

Strong index, significantly down. An optimistic view of his position suddenly changed to uncertainty.

Сильный индекс, значительно упал. Рынок не поддерживает быков.

Strong index, significantly down. The market does not support the bulls.

Средний индекс, незначительно вырос. Отток средств из лонгов на высоком уровне.

Medium index, slightly up. Outflow of funds from longs at a high level.

COF appears moderately undervalued on P/B and P/FCF, but weaker than the industry in ROE and margins; earnings growth and debt reduction support a cautiously positive view.

Key Points
Fintechs and traditional banks are increasingly competing on the same turf.
Buying fintech technology can be faster than building it.
Younger digital customers are increasingly valuable to traditional banks.
Capital One (NYSE: COF) may have already shown the rest of the banking industry where the next big acquisition opportunity lies. In January, Capital One agreed to pay $5.15 billion for Brex, a fintech company that combines corporate credit cards with expense-management software, payments, and artificial intelligence (AI)-powered financial tools. Capital One Chief Executive Officer Richard Fairbank said the deal would accelerate the bank's push into business payments. I don't think Brex will be the last.
Analysts have spent decades watching banks buy other banks. The logic was easy to understand. Buy another bank, pick up its deposits, loans, customers, and branches, eliminate overlapping costs, and hopefully increase earnings.
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That still works. Fifth Third Bancorp (NYSE: FITB), for instance, completed its acquisition of Comerica earlier this year, creating a bank with roughly $294 billion in assets. But banks don't need more branches nearly as much as they need better technology, younger customers, faster payments, and digital platforms capable of competing with fintech companies that were built from scratch for smartphones. That's where the next wave of bank acquisitions is headed.
Buying growth instead of building it
Building a competitive fintech platform isn't easy. A bank can spend years developing new payment systems and mobile banking products; underwriting technology; and building artificial intelligence (AI) capabilities. Or it can just buy a company that already has the technology and millions of customers using it.
PwC recently argued that the technology gap between leading banks and many regional institutions is widening, and that acquiring fintech companies can sometimes be the fastest way to close it. Capital One's Brex deal puts some real money behind that argument.
Brex isn't another bank with thousands of branches. It's an AI-native financial platform used for corporate cards, payments, expense management, and automated financial workflows. Brex says it serves tens of thousands of businesses, including more than 300 public companies. That's what Capital One bought. And if this plays out successfully, other banks will notice.
One fintech I'd watch
One company that fits the profile is Dave (NASDAQ: DAVE). To be sure, I'm not predicting that Dave will be acquired tomorrow. But if I were running a large bank and looking for a fintech acquisition, it would certainly make my list.
Dave has more than 14 million cusrtomers, with its platform focused largely on consumers who need short-term liquidity between paychecks. And this isn't some young, money-losing fintech hoping to eventually figure out a business model.
Second-quarter revenue increased 30% to $170.8 million, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped 48% to $75.5 million, and monthly transacting members increased 17% to 3.08 million. Management also raised its full-year revenue forecast to between $725 million and $735 million and $315 million to $325 million in adjusted EBITDA.
That's a fintech with scale, growth, customers, and profits. And it also gives a traditional bank something particularly valuable: access to younger and underserved consumers who may not have much loyalty to conventional banks. The catch is the price.
Dave's market cap clocks in at around $4.6 billion, and an acquisition would almost certainly require a meaningful premium. But Capital One just demonstrated that a major bank is willing to spend more than $5 billion for the right fintech platform. Dave is at least in the right neighborhood.
Banks are becoming technology companies
There's another development you shouldn't ignore. The line separating banks from fintech companies is disappearing from both directions.
Just this month, the fintech Chime (NASDAQ: CHYM) agreed to buy Stride Bank for $590 million, giving Chime direct access to a national banking charter. Chime expects the deal to generate more than $100 million in additional financial benefits through lower costs and expanded lending opportunities.
Also worth noting: U.K-based digital banking platform Revolut just received conditional approval for a U.S. national bank charter as it prepares to launch a full-service American bank in 2027. So fintechs are actually becoming banks while banks are buying fintechs. That's not a coincidence.
Consumers increasingly expect banking to work like every other digital service they use. They want instant payments, automated budgeting, fast credit approval, intuitive apps, and fewer reasons to visit a branch. Banks can build all of that themselves. But for some, writing a multibillion-dollar check may be faster, or even less costly.
Capital One's purchase of Brex could ultimately look less like an unusual acquisition and more like the beginning of a much larger consolidation trend. And if I'm looking for the next major bank acquisition, I'm spending considerably more time looking at a company like Dave than another regional bank.
Should you buy stock in Dave right now?
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Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool recommends Capital One Financial. The Motley Fool has a disclosure policy.

Prediction: The Next Big Bank Acquisition Is a Fintech, Not Another Bank

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The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores?
Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value Score
Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth Score
Growth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum Score
Momentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM Score
If you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank
The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.8% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Capital One (COF)
Headquartered in McLean, VA, Capital One Financial Corporation was founded in 1988 and primarily focuses on consumer and commercial lending, as well as deposit origination. The company offers a wide range of financial products and services to consumers, small businesses, and commercial clients across the United States through its banking and non-banking subsidiaries.
COF is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Momentum investors should take note of this Finance stock. COF has a Momentum Style Score of B, and shares are up 0.3% over the past four weeks.
Eight analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.74 to $20.29 per share. COF also boasts an average earnings surprise of +12.8%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, COF should be on investors' short list.
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This article originally published on Zacks Investment Research (zacks.com).

Why Capital One (COF) is a Top Momentum Stock for the Long-Term

Key Points
Berkshire reduced several of its bank positions in the second quarter.
Berkshire added to one of its airline positions and also bought homebuilders in the quarter.
Both airlines and homebuilders could benefit from lower interest rates.
Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) has now revealed two full quarters of stock purchases and sales since Greg Abel became chief executive officer of the enormous conglomerate. He's stepping into the large shoes left by Warren Buffett, who remains executive chairman of the company and actively involved in stock picking, according to various reports.
Abel has not been afraid to shake things up, quickly making Alphabet one of the largest stocks in the portfolio and buying and selling many other stocks. In the second quarter, Berkshire trimmed many of its bank stocks, including Bank of America, while increasing or adding new positions in companies that can benefit from lower yields.
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Is Abel betting on lower interest rates?
Trimming banks
In Q2, Berkshire Hathaway trimmed its Bank of America position by 6% and slashed its positions in Ally Financial and Capital One by 7% and 58%, respectively.
Bank of America is a money-center bank involved in all aspects of banking, from commercial lending to investment banking. Ally and Capital One are large banks as well, but heavily involved in consumer lending, such as auto and credit card lending.
Generally, bank stocks have performed relatively well this year. Not only have banks seemed to serve as diversification away from artificial intelligence, but the yield curve has steepened, meaning shorter-dated bonds yield less than long-term ones.
This is an ideal setup for most banks, which borrow money at the short part of the yield curve and lend toward the longer end. Ally and Capital One haven't performed as well, partly due to investor concerns that consumers are starting to feel the pinch and that loan losses will rise.
Borrowing costs are also high now, which could be stunting loan demand.
Still, if the yield curve keeps steepening, that could, in theory, be good for banks, although I do think longer-term yields at current levels could be starting to spook bank investors as well. Still, in theory, as long as the curve stays steep, that should be good for bank profits, assuming credit stays in check.
Buying sectors that would benefit from lower interest rates
In Q2, Berkshire increased its positions in Delta Air Lines (NYSE: DAL) and Lennar Corp and initiated a new position in D.R. Horton.
Delta is one of the largest U.S. Airlines tend to perform better in a lower-rate environment because most airlines carry significant debt, some of which is tied to variable interest rates that are affected by broader interest rate changes.
At the end of Q2, Delta carried $13.6 billion in debt, 22% of which is subject to variable interest rates, so lower rates would mean lower interest payments.
Additionally, a lower-rate environment tends to stimulate economic activity and spending, benefiting airlines.
Lennar and D.R. Horton are two of the largest homebuilders in the U.S. The mortgage and real estate industries have been absolutely hammered by high rates, particularly at the longer end of the curve, such as the 10-year yield, which directly influences mortgage rates.
Higher rates combined with high home values have made buying a home difficult for much of the country's consumers. Both of these stocks have struggled this year.
You don't buy housing stocks in a rising-rate environment. Although concerns about persistent inflation are certainly real, nobody can say for certain what will happen.
There have been some signs that inflation is softening, perhaps clearing the way for lower rates. An end to the Iran war would surely help this cause, not that anyone knows when that is coming either.
It's worth noting that, aside from Bank of America, the other stocks mentioned in this article are relatively small positions in Berkshire's vast equity portfolio, so they may not be very indicative of anything.
Furthermore, Berkshire typically tries to buy stocks that will perform well throughout the economic cycle.
Should you buy stock in Berkshire Hathaway right now?
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Ally is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Berkshire Hathaway, D.R. Horton, and Lennar. The Motley Fool recommends Capital One Financial and Delta Air Lines. The Motley Fool has a disclosure policy.

Is Greg Abel Betting on Lower Interest Rates? The Berkshire Hathaway CEO Just Trimmed Bank Stocks Like Bank of America and Bought 3 Stocks That Would Benefit From Lower Yields.

Snowflake SNOW) shares surged 16% in Thursday’s trading session after the cloud-data leader crushed its Q2 expectations yesterday evening and raised its full-year outlook.
More importantly, Snowflake’s growth is accelerating as artificial intelligence drives greater usage of its AI Data Cloud platform, giving investors plenty to like despite the stock’s increasingly lofty valuation.
Image Source: Zacks Investment Research
Snowflake Crushes Q2 Expectations
Snowflake posted Q2 adjusted EPS of $0.62, handily topping expectations of $0.45 and rising from $0.35 per share in the prior year quarter. Revenue rose 35% year over year to $1.54 billion, also surpassing estimates of $1.47 billion.
Even more encouraging was product revenue, which climbed 37% to $1.49 billion, marking Snowflake’s third consecutive quarter of accelerating product-revenue growth.
Remaining performance obligations (RPO), representing contracted future revenue, increased 30% YoY to $9 billion, while the number of customers generating more than $1 million in trailing-12-month product revenue jumped 27% to 828.
Notably, Snowflake has surpassed top-line estimates in every quarter since it went public in 2020 and has exceeded earnings expectations for nine consecutive quarters, with an average EPS surprise of 22.77% in its last four quarterly reports.
AI Momentum & Raised Guidance
AI is becoming a meaningful growth catalyst rather than simply a long-term opportunity, with management indicating that AI products accounted for roughly half of Snowflake’s recent growth acceleration.
Adoption of its AI coding agent CoCo surpassed 9,100 accounts after adding more than 2,000 during Q2, while CoWork, Snowflake’s agentic workplace offering, reached 5,800 accounts. The company also added 692 net new customers during the quarter.
Reflecting this momentum, Snowflake raised its full-year product-revenue forecast to $6.07 billion, or 36% growth, from $5.84 billion and 31% growth previously.
For Q3, product revenue is projected between $1.588 billion and $1.593 billion, representing another impressive 37%-38% increase. Snowflake also lifted its full-year non-GAAP operating-margin outlook to 14.5% from 13.5%, showing improving profitability alongside accelerating growth.
It's noteworthy that Snowflake's growing enterprise footprint is supported by strategic partnerships with Amazon AMZN), Microsoft MSFT), Alphabet GOOGL), and Nvidia NVDA), helping enterprises deploy increasingly sophisticated data and AI workloads across its platform.
Prominent customers have included Capital One COF), Thomson Reuters TRI), Booking Holdings' BKNG) Booking.com, and DraftKings DKNG).
Snowflake's Premium Valuation
The biggest reason investors may be hesitant to chase today's rally is valuation.
Even before the Q2 post-earnings surge, SNOW was trading at more than 15X forward sales with a forward P/E multiple above 150X.
Those marks are significantly above its Zacks Internet-Software industry averages of around 4X forward sales and 20X forward earnings, respectively.
Today's 16% jump only expands that premium on a static-estimate basis, although higher revenue and EPS projections following the strong report should help offset some of the valuation expansion.
Image Source: Zacks Investment Research
Bottom Line
Snowflake’s Q2 results appear strong enough to justify investors' enthusiasm. Accelerating product-revenue growth, rapidly increasing AI adoption, a $9 billion backlog, and raised growth and profitability guidance suggest the company’s fundamental story is getting stronger.
While SNOW's premium valuation could make additional near-term upside more difficult following today's sharp rally, investors with a longer-term horizon may still have reason to remain bullish, especially if AI keeps driving faster platform consumption.
Supporting that outlook, Snowflake stock currently sports a Zacks Rank #2 (Buy), as upward earnings estimate revisions following such an impressive beat-and-raise quarter could further strengthen its investment case.
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Snowflake (SNOW) Stock Soars 16% After Q2 Earnings: Is It Still a Buy?

Key Points
Berkshire Hathaway reduced its positions in Capital One, Bank of America, and Ally Financial.
The Capital One sale was the largest in percentage terms, while Bank of America had the largest dollar amount.
Ally appears to be a position-sizing move, as Berkshire aims to maintain less than 10% ownership.
Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB) has historically been one of the largest shareholders of U.S. banks, and that's still true today. The conglomerate maintains large stakes in Bank of America (NYSE:BAC) and American Express (NYSE:AXP), while also holding several smaller positions in the financial sector.
New CEO Greg Abel and his team might be souring on the banking industry, or at least might see good reasons to reduce exposure to it. In the most recent quarter, Berkshire sold shares of three bank stocks, while simultaneously pouring billions of dollars into the technology sector.
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Image source: Getty Images.
There's more to the story, however. Here's a rundown of Berkshire's three bank reductions, and what investors should keep in mind.
The 3 bank stocks Berkshire sold
Berkshire Hathaway was a net buyer of stocks in the second quarter for the first time in several years. But that's not the case when it comes to the financial sector. As mentioned, Berkshire reduced its stakes in three bank stock positions:
Capital One (NYSE:COF) was reduced by 58%, the sharpest percentage decline. Berkshire now owns about $646 million of Capital One stock, representing about a 0.5% stake in the company.
Bank of America (NYSE:BAC) was reduced by $1.7 billion, as Berkshire sold 30.2 million shares. It now owns 483.4 million shares, and Bank of America remains one of the largest holdings in the portfolio.
Ally Bank (NYSE:ALLY) was the smallest of the three sales, with Berkshire reducing its stake by 7%. Berkshire now owns 8.9% of Ally, a stake valued at about $1.14 billion.
Let's put this in some context. Capital One experienced a significant reduction in its position. Berkshire sold about $750 million in the bank's stock (we don't know the exact selling price). Bank of America was the largest sale by dollar amount, and Berkshire has been gradually selling shares over the past few quarters, but it remains a massive part of Berkshire's portfolio. Even after the sale, Berkshire owns nearly 7% of Bank of America, a stake worth more than $30 billion.
Finally, don't read too much into the Ally sale. After the reduction, Berkshire owns about 9% of Ally and, for regulatory reasons, aims to keep this stake below 10%. So, this could simply be a sale to ensure that Ally buybacks wouldn't push it above the threshold.
Why did Berkshire sell bank stocks?
To be sure, we don't know exactly why Berkshire sold. Leadership generally doesn't discuss the specific motivation behind individual transactions. There could be concerns about consumer credit deteriorating, which could explain the sharp reduction in credit card-focused Capital One, in particular.
Berkshire could also potentially be worried about interest rate risk. Rising interest rates are good for banks in some ways, but banks that typically offer minuscule deposit rates (like Bank of America) could have a tougher time competing in a "higher for longer" environment without raising deposit rates, which would cut into margins.
Another explanation could be valuation or position sizing. Between American Express and Bank of America alone, the portfolio is rather concentrated in the financial sector. The sector has performed extremely well in 2026, and this could be a bit of profit-taking in names that have made Berkshire quite a bit of money.
The bottom line is that we don't know for sure. And just because Berkshire sold shares of these stocks doesn't necessarily mean that you should do the same. Full disclosure: Bank of America is one of my largest investments, and I'm not selling a single share because Berkshire did. But it is causing me to take a step back and keep a closer eye on the health of the U.S. consumer to watch for cracks forming.
Should you buy stock in Berkshire Hathaway right now?
Before you buy stock in Berkshire Hathaway, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $437,097!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,355,077!*
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Bank of America is an advertising partner of Motley Fool Money. Ally is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Matt Frankel, CFP® has positions in American Express, Bank of America, and Berkshire Hathaway. The Motley Fool has positions in and recommends American Express and Berkshire Hathaway. The Motley Fool recommends Capital One Financial. The Motley Fool has a disclosure policy.

Berkshire Hathaway Just Sold 3 Bank Stocks. Here’s Why Investors Should Take Notice

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Russell 1000 ETF (Symbol: IWB) where we have detected an approximate $126.0 million dollar outflow -- that's a 0.3% decrease week over week (from 116,600,000 to 116,300,000). Among the largest underlying components of IWB, in trading today Blackrock Inc (Symbol: BLK) is down about 0.9%, NextEra Energy Inc (Symbol: NEE) is up about 0.3%, and Capital One Financial Corp (Symbol: COF) is up by about 0.2%. For a complete list of holdings, visit the IWB Holdings page » The chart below shows the one year price performance of IWB, versus its 200 day moving average:
Looking at the chart above, IWB's low point in its 52 week range is $345.21 per share, with $426.92 as the 52 week high point — that compares with a last trade of $417.87. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Further IWB Research:

Noteworthy ETF Outflows: IWB, BLK, NEE, COF

Key Points
Normally, investors look at 30-day delinquency rates to gauge credit risk at companies like Capital One.
A new Federal Reserve research report takes a slightly deeper dive into the delinquency data.
Credit risk is higher than it was just a few years ago, but the real trouble is concentrated among those already struggling.
When Capital One Financial (NYSE: COF) reported its second-quarter 2026 earnings, it posted a 30-day delinquency rate of 3.13%, down from the previous year and below the first-quarter rate. Given the high rate of inflation and concerns about stretched consumers, that's a good sign. But what should investors really take away from this data? A recent Federal Reserve report takes a deeper dive into the numbers.
Capital One isn't alone
Capital One is a large bank and credit card company, with a focus on offering credit to lower-quality customers. But it generally doesn't delve into the higher-risk spaces of the industry. This is a key reason why Synchrony Financial (NYSE: SYF), which issues store cards, had a higher 30-day delinquency rate of 4.16%. Store cards tend to carry more credit risk. But, even here, the trends aren't bad. Like Capital One, Synchrony's 30-day delinquency rate was down sequentially and year over year.
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Bread Financial (NYSE: BFH), which, like Synchrony, offers private-label cards, had a delinquency rate of 5.25% in the second quarter. As with the other two card issuers above, that figure was lower than a year ago and than in the first quarter. Overall, based on results from these financial institutions, it looks like consumers are doing OK right now.
But inflation is running hot, with frequent media coverage of consumers being forced to tighten their belts. The Federal Reserve Bank of New York took a deeper dive into the numbers to get a read on what is going on. The big takeaway is that consumers are, in fact, doing OK. But there's still some risk to consider.
Nothing to worry about, yet
In a Liberty Street Economics report, researchers examined trends in 30- and 90-day delinquency rates, which are loans that are seriously delinquent and likely to be charged off. To these, the researchers added a third measure, which they called "the flow." Essentially, without getting too deep into the details, these are the loans that have moved from 30-day to 90-day delinquent in a given period.
The bad news first: "between 2022:Q3 and 2026:Q1, the percentage of credit card balances 90+ days delinquent rose from 7.6 percent to 12.8 percent, prompting concerns that Americans are falling behind on their debt payments at rates not seen since the Great Recession." That sounds really bad, but "the flow" metric changes the story in an important way.
According to the researchers, "the flow delinquency rate--which captures the rate of new delinquencies--has remained relatively stable for almost two years." In other words, consumers are, for the most part, managing through a difficult period. The real trouble lies among those who are truly struggling. And a key part of the story here is that the researchers believe lenders appear to be reporting on delinquent debts longer before charging them off, which has inflated the 90-day delinquency rate.
This isn't a sign that there's no risk. Summing up their results, the Fed researches noted that "when the question is 'how are households doing right now?' the flow delinquency rates...provide a more accurate view of current consumer repayment behavior. By those measures, we find that the pace of credit card delinquency is elevated but has been largely stable since 2024." Given the inflation backdrop and concerns about consumer spending, that sounds about right.
Keep a close eye on credit card delinquency rates
Credit card delinquency rates are often the first place where financial strain shows up. So you should continue to monitor the 30-day delinquency rate at companies like Capital One, Synchrony, and Bread Financial. Right now, consumers appear to be holding up reasonably well, but that doesn't mean the credit situation will remain this sanguine forever. And if you are concerned, you may consider trading into companies with better credit metrics, noting that Bread Financial's delinquency rate is more than two percentage points higher than Capital One's.
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Credit Card Balances 90 Days Late Have Nearly Doubled Since 2022. New Delinquencies Have Not Moved.

It has been about a month since the last earnings report for Capital One (COF). Shares have added about 9.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Capital One due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.
Capital One's Q2 Earnings Beat on Higher Revenues, Lower Provisions
Capital One’s second-quarter 2026 adjusted earnings of $5.81 per share significantly outpaced the Zacks Consensus Estimate of $4.85. The bottom line was up from $5.48 in the prior-year quarter.
Results benefited from a rise in NII and non-interest income, along with a substantial decline in provisions. Loan growth and improvement in NIM were other positives. However, higher expenses and a sequential decline in deposits were undermining factors.
Results excluded acquisition-related amortization expenses and Discover Financial and Brex integration costs. Including these, net income available to common stockholders (GAAP basis) was $2.94 billion or $4.73 per share against a net loss available to common stockholders of $4.34 billion or $8.58 per share in the prior-year quarter.
Revenues Increase, Expenses Rise
Total net revenues were $15.85 billion, rising 27% year over year. Also, the top line beat the Zacks Consensus Estimate of $15.7 billion.
NII was $12.37 billion, up 24% from the prior-year quarter. NIM expanded 39 basis points (bps) to 8.01%.
Non-interest income was $3.48 billion, jumping 39%. This was driven by higher net discount and interchange fees, service charges and other customer-related fees and other income.
Non-interest expense was $9.04 billion, up 29%. The increase reflected a rise in salaries and associate benefits, occupancy and equipment costs, marketing expenses, communications and data-processing costs, amortization of intangibles and other expenses.
The efficiency ratio was 57.05%, falling from 55.96% in the prior-year quarter. A rise in the efficiency ratio indicates lower profitability.
As of June 30, 2026, loans held for investment were $457.17 billion, up 2% from the prior quarter. Total deposits were $484.26 billion, down 1% sequentially.
Credit Quality Improves
Provision for credit losses was $2.99 billion, down 74% year over year. The allowance for credit losses, as a percentage of loans held for investment, was 5.02%, down 41 bps.
The 30-plus-day performing delinquency rate was 2.91%, down 22 bps year over year. The 30-plus-day delinquency rate was 3.13%, down 19 bps. The quarter included a $662-million loan reserve release, primarily driven by favorable credit performance in Domestic Card.
On the other hand, net charge-offs (NCOs) were $3.64 billion, rising 19% year over year.
Capital Ratios Decline
As of June 30, 2026, the common equity Tier 1 capital ratio was 13.7%, down from 14% in the prior-year quarter. The Tier 1 capital ratio was 14.8%, down from 15.1% a year ago.
During the reported quarter, Capital One repurchased 14 million shares for $2.7 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Capital One has a average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a score of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Capital One has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Capital One (COF) Up 9.6% Since Last Earnings Report: Can It Continue?

Investors in Capital One Financial Corp (Symbol: COF) saw new options become available today, for the September 2027 expiration. One of the key inputs that goes into the price an option buyer is willing to pay, is the time value, so with 394 days until expiration the newly available contracts represent a potential opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the COF options chain for the new September 2027 contracts and identified one put and one call contract of particular interest.
The put contract at the $200.00 strike price has a current bid of $15.10. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $200.00, but will also collect the premium, putting the cost basis of the shares at $184.90 (before broker commissions). To an investor already interested in purchasing shares of COF, that could represent an attractive alternative to paying $223.37/share today.
Because the $200.00 strike represents an approximate 10% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 72%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 7.55% return on the cash commitment, or 6.99% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Capital One Financial Corp, and highlighting in green where the $200.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $240.00 strike price has a current bid of $24.00. If an investor was to purchase shares of COF stock at the current price level of $223.37/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $240.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 18.19% if the stock gets called away at the September 2027 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if COF shares really soar, which is why looking at the trailing twelve month trading history for Capital One Financial Corp, as well as studying the business fundamentals becomes important. Below is a chart showing COF's trailing twelve month trading history, with the $240.00 strike highlighted in red:
Considering the fact that the $240.00 strike represents an approximate 7% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 49%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 10.74% boost of extra return to the investor, or 9.95% annualized, which we refer to as the YieldBoost.
The implied volatility in the put contract example, as well as the call contract example, are both approximately 33%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 251 trading day closing values as well as today's price of $223.37) to be 32%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Further COF Research:

Interesting COF Put And Call Options For September 2027

In trading on Monday, shares of Capital One Financial Corp's 4.625% Dep Shares Non-Cumul Perp Pfd Stock Series K (Symbol: COF.PRK) were yielding above the 7% mark based on its quarterly dividend (annualized to $1.1562), with shares changing hands as low as $16.32 on the day. This compares to an average yield of 6.77% in the "Financial" preferred stock category, according to Preferred Stock Channel. As of last close, COF.PRK was trading at a 33.60% discount to its liquidation preference amount, versus the average discount of 13.09% in the "Financial" category. Investors should keep in mind that the shares are not cumulative, meaning that in the event of a missed payment, the company does not have to pay the balance of missed dividends to preferred shareholders before resuming a common dividend.
Below is a dividend history chart for COF.PRK, showing historical dividend payments on Capital One Financial Corp's 4.625% Dep Shares Non-Cumul Perp Pfd Stock Series K:
Further COF.PRK Research: